TiBook
Free Tool

How Much House Can I Afford?

Estimate an affordable home price from your income and debt (Conventional, FHA, VA, or custom DTI) or from a fixed monthly housing budget. Includes tax, insurance, HOA, and PMI when down <20%.

Your numbers
Income and DTI, or a fixed monthly budget.

PMI (0.5%/yr of loan) included when down <20%

Affordability
Max price and monthly housing
Max home price$432,552
Loan$346,042
Down payment$86,510
Principal & Interest$2,187.22
Property tax$432.55
Insurance$180.23
Total housing$2,800.00

DTI rule: 28/36

Front-end (housing / income): 28.0% · Back-end (housing + debt / income): 33.0%

How Lenders Look at Affordability

Lenders use debt-to-income (DTI) to see how much of your income goes to housing and other debt. The front-end ratio is housing cost (P&I, tax, insurance, HOA, PMI) divided by gross monthly income. The back-end ratio adds other monthly debt (car, student loans, credit cards, etc.). Lower DTI usually means easier approval and better terms.

Common DTI Rules

  • Conventional (28/36): Housing ≤28% of income and housing+debt ≤36%. Common for conforming loans.
  • FHA (31/43): Housing ≤31% and housing+debt ≤43%. FHA allows a bit more, often with mortgage insurance.
  • VA (41%): No front-end rule; housing+debt ≤41%. Used for VA-guaranteed loans.
  • Custom: Some programs or your own budget may use a different back-end limit (e.g. 25% or 45%).

Ways to Afford More (or Borrow Smarter)

  • Lower other debt: Paying down cars, cards, or student loans reduces monthly debt and can raise the amount you can put toward housing.
  • Larger down payment: Cuts the loan size and often the rate; 20% or more can avoid PMI.
  • Better rate: Improving credit and shopping lenders can reduce the rate and the P&I for the same loan size.
  • Tax and insurance: Use realistic local estimates; they directly affect housing cost and what you qualify for.

Frequently Asked Questions

What is the 28/36 rule for mortgages?
Housing should not exceed 28% of gross monthly income (front-end) and housing plus other debt should not exceed 36% (back-end). It’s a common benchmark for conventional loans.
What is DTI and why does it matter?
DTI is the share of gross income used for debt and housing. Lenders use it to gauge risk. Lower DTI often means better approval odds and rates.
How do FHA and VA DTI limits differ?
FHA typically uses 31% front-end and 43% back-end. VA usually does not apply a front-end limit but uses a 41% back-end. Each program has other rules (e.g. PMI, funding fees).
What counts as housing cost for affordability?
Principal, interest, property tax, homeowners insurance, HOA, and PMI when applicable. Our calculator includes these so the estimate aligns with typical underwriting.